Google Losing Groupon a $6 Billion Save

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Now that Groupon's traffic weekly traffic is down 20 percent and chief rival LivingSocial's traffic is up 80 percent, Groupon no longer looks like its worth $6 billion.

I admit that I never really liked Groupon and its public dismissal of Google's $6 billion buyout offer just reeked of hubris. Then there's the idea that the Chicago-based company might be worth $15 billion -- and that it better strike while the iron's hot because its copycat rivals are taking a huge chunk of their market share. In other words, sell your shares to the suckers now because in a few months Groupon may be worth a whole lot less, according to a report from Experian Hitwise.

Buoyed by a $10 deal on $20 Amazon gift certificates, Living Social grew its traffic by 80 percent in the last week, and now has more than half of the visits made to Groupon. Groupon, the industry leader, saw traffic drop by 20 percent, wrote analyst Bill Tancer. Of course, the Amazon gift certificate wasn't really a coupon, but a deal brokered between LivingSocial and Amazon -- but I'm sure the buyers didn't care, they just wanted a deal.

So now maybe everyone will see that Groupon holds no patents or intellectual property that makes it more valuable than its leading competitor. If Google missed out on paying $6 billion to own Groupon, it should be relieved that it had a lucky escape. Google could probably purchase Living Social for that or less now -- although it's already working on its own version for probably a fraction of the cost.

As for Groupon, I'm sure it's second-guessing its decision to refuse a $6 billion sure thing.